We are upgrading our recommendation on
Humana, Inc.
(
HUM
) to Outperform based on its robust top-line growth, sturdy cash
position and favorable acquisitions along with the increased
membership guidance. Humana's third-quarter earnings surpassed the
Zacks Consensus Estimate and increased guidance for 2011.

On January 10, 2012, Humana announced an agreement with St.
Vincent's HealthCare, whereby the members of Humana's Medicare
Advantage plans will be able to use St. Vincent's programs,
facilities and doctors, including cardiologists and other
specialists.

Overall, we believe that the efficient growth strategy through
acquisitions, stable ratings and a strong investment portfolio will
likely attract long-term investors. Our six-month target price of
$113.00 equates to 13.4x our earnings estimate for 2011. Combined
with the $1.00 per share annual dividend, this target price implies
an expected total return of 20.3% over that period.

We downgraded our recommendation on
Guess? Inc.
(
GES
) from Neutral to Underperform as its third-quarter 2012 core
earnings of $0.71 per share missed both Zacks Consensus Estimate as
well as year ago earnings by 28% and 5%, respectively. The current
global economic headwinds and the diminishing disposable income of
the consumers were responsible for the earnings miss.

Same-store sales also declined in the quarter. In the wholesale
segment, reorders for the fall collections as well as spring/summer
orders were weak. Channel mix was more than offset by accelerating
operating expenses to maintain more stores and planned
infrastructure expenses.

The potential slowdown in Europe, which has actually been one of
the company's few bright spots, also creates a major risk for
shares of GES. Our six-month target price is $27.

The surprisingly weak reports this morning on the U.S. labor
market and consumer spending run counter to the recent run of
favorable economic data. It is difficult to tell whether this
morning's disappointing readings reflect one-off seasonal
distortions or the start of a trend reversal. The latter seems
unlikely given the absence of any corroborating evidence in other
reports. If anything, all other readings of the U.S. economy are
pointing towards continued positive momentum.

Beyond U.S. shores, we have subdued inflation numbers out of
China. And the European Central Bank (ECB) acted as expected by
leaving interest rates unchanged. We also have successful bond
auctions in Italy and Spain this morning that are pushing their
bond yields in the right direction.

The major news of the day pertains to the soft economic readings
on the Retail Sales and Jobless Claims fronts. December Retail
Sales numbers came in weaker than expected, up 0.1% compared to
expectations of 0.3% gains. This compares to the November gain of
0.4%, which was revised upwards from the originally reported 0.2%
level. 'Core' Retail Sales, which excludes automobile and gasoline
sales data, also came in weaker than expected.

This is the weakest Retail Sales reading since May 2011 and runs
counter to the recent trend of improving trends in the building
blocks of consumer spending. Measures of consumer confidence have
been moving up and the labor market has been steadily moving in the
right direction, notwithstanding the jump in today's jobless claims
numbers.

The Retail Sales report is admittedly not a perfect proxy for
consumer spending since it only includes 'goods' sales at retail
establishments and leaves out the much bigger consumer outlays on
'services.' But it nevertheless provides valuable clues to trends
in consumer spending, which is the backbone of the U.S.
economy.

Momentum on the consumer spending front can be sustained only if
the recent improving trend on the labor market front remains in
place. This morning's Jobless Claims report runs counter to that
trend, though it is not unusual to see one-off seasonal distortions
in this series.

We got a major jump in initial Jobless Claims this morning, up
24K to 399K. The four-week average increased by 7.8K to 381.8K.
This report reverses the gains of the last many weeks and takes us
perilously close to the 400K level.

On the earnings preannouncements front, we got positive guidance
from
Tractor Supply Company
(
TSCO
), while
Chevron
(
CVX
) guided lower.
PVH Corp.
(
PVH
) provided a positive outlook for the fourth quarter given strength
in its Calvin Klein and Tommy Hilfiger brands, but provided a
modestly disappointing outlook for 2012 by pushing the gains to the
second half of the year.

Every day, the analysts at Zacks Equity Research select two
stocks that are likely to outperform (Bull) or underperform (Bear)
the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the
Analyst Blog
provides analysis from Zacks Equity Research about the latest news
and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and
qualitative analysis to help investors know what stocks to buy and
which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150
publicly traded stocks. Our analysts are organized by industry
which gives them keen insights to developments that affect company
profits and stock performance. Recommendations and target prices
are six-month time horizons.

Zacks.com is a property of
Zacks Investment
Research
, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from
MIT Len knew he could find patterns in stock market data that would
lead to superior investment results. Amongst his many
accomplishments was the formation of his proprietary stock picking
system; the
Zacks
Rank
, which continues to outperform the market by nearly a 3 to 1
margin. The best way to unlock the profitable stock recommendations
and market insights of Zacks Investment

Research is through our free daily email newsletter; Profit from
the Pros. In short, it's your steady flow of Profitable ideas
GUARANTEED to be worth your time! Register for your free
subscription to Profit from the Pros at
http://at.zacks.com/?id=4582
.

Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
making any investments. Nothing herein should be construed as an
offer or solicitation to buy or sell any security.

Please note that once you make your selection, it will apply to all future visits to NASDAQ.com.
If, at any time, you are interested in reverting to our default settings, please select Default Setting above.

If you have any questions or encounter any issues in changing your default settings, please email isfeedback@nasdaq.com.

Please confirm your selection:

You have selected to change your default setting for the Quote Search. This will now be your default target page;
unless you change your configuration again, or you delete your
cookies. Are you sure you want to change your settings?